Blockchain ETF Will Hit Toronto’s Stock Exchange
Canada has given the green light to a blockchain exchange-traded fund (ETF). This new actively managed, blockchain ETF will hit Toronto’s Stock Exchange markets sometime next week. According to Harvest Portfolios Group, a company founded with the vision to create investment products that generate steady long-term income, the fund plans to invest “in equity securities of issuers exposed, directly or indirectly to the development and implementation of blockchain and distributed ledger technologies”. Given the potentially risky and extremely volatile nature of the cryptocurrency market, it’s quite possible that investors might be looking into blockchain funds as a more stable investment option.
Back in January, Harvest Portfolios filed a prospectus with Canadian securities regulators. Outlined in the paperwork was the intention to launch Canada’s very first blockchain ETF. The ETF is designed to monitor and track emerging blockchain technologies. According to recent reports, Ontario’s Securities Commission has now granted approval to the proposed Blockchain Technologies ETF (HBLK). There’ll be a fixed 0.65% management fee associated with the fund.
Other Blockchain ETF Providers
Harvest Portfolios, an independent Canadian investment firm, already has an established Blockchain Technologies Index. This index tracks the performance of blockchain segments dealing with the development and implementation of distributed ledger technologies (DLT) throughout North America. The company hopes that its new ETF will be able to replicate the performance of its blockchain index.
Notably, Harvest Portfolios Group Inc. is not the only company offering a Blockchain ETF. Evolve Funds Group Inc. and First Trust Portfolios Canada had also filed paperwork with Canada’s securities regulators regarding blockchain funds. First Trust has introduced what it calls the Indxx Innovative Transaction & Process ETF, which has a 0.80% management fee. One of the goals of this fund is replicate the performance of the Indxx blockchain Index. The US version of this ETF is already trading on Nasdaq (LEGR), and its Canadian equivalent plans to trade under the BLCK ticker.
High Demand for Blockchain Investments
These ETFs seem to have been launched in response to a high demand for blockchain-based investments. Karl Cheong, Head of ETFs at First Trust, states that when he talks to his clients about traditional equity products, they often express interest in cryptocurrency or blockchain related investments. He adds that these days investors “feel blockchain is the more viable option” compared to cryptocurrencies.
Mr. Cheong also considers the idea of distributed ledgers to be “still very novel” but he points to DLT’s potential to save billions of dollars, which makes it “quite attractive”. Although he doesn’t mention exactly how, research conducted by organizations in Dubai and other places claim that billions of dollars can be saved just from moving to “paperless government”. What this implies is that paper documents required for paying bills, license and registrations, and even visa applications could all be done electronically via a blockchain.
These initiatives might have a better chance of survival compared to cryptocurrency-related investments. This is because of the global crackdown on the crypto-market by influential authorities. These same authorities are much more receptive to blockchain technology, which is the foundation upon which most cryptocurrencies are built. Even if cryptos don’t gain mainstream approval, their underlying blockchain sure seems like it will.